Cash Buyers of Single-Family Properties Seeking Subsequent Financing

All-cash property purchases fell below 1 million last year for the first time in three years.

A total of 944,892 single-family properties and condos were sold to all-cash buyers in 2014, down 13 percent from 2013, according to data from RealtyTrac. The all-cash sales represented 31 percent of all single-family property sales during last year — a four-year low.

Nearly 4 million properties have been sold to all-cash buyers over the past four years, led by sales in Florida, California, Michigan, Georgia and Arizona.

Interest from institutional investors — those buying at least 10 properties within a year — and all-cash buyers is waning as lower priced and distressed-driven properties have declined in availability.

Also of note, 8 percent of cash buyers in the last two years have subsequently taken out a mortgage after the initial purchase, according to a RealtyTrac analysis of nearly 1.5 million all-cash purchases of single-family properties nationwide from January 2013 through December 2014.

On average, the original cash purchase prices were 93 percent of the purchased property’s full market value, and a subsequent mortgage was recorded an average of 202 days — nearly seven months — after the sale.

The county with the highest percentage of cash sales with a subsequent mortgage was San Francisco County, Calif., where 24 percent of cash buyers took out a subsequent mortgage; followed by Denver County, Colo. (21 percent); Marin County, Calif. (20 percent); and San Mateo and Santa Clara County, both in California and both with 19 percent of cash purchases with subsequent financing.

Seeking financing after an all-cash purchase allows investors to unlock equity from their existing portfolios.

B2R Finance has been active is helping investors refinance rental property investments with asset-based lending, which doesn’t rely on the traditional debt-to-income ratio used by most lenders in the residential space, rather we consider the full appraised value and cash flow of a rental property, providing up to 75 percent LTV of the property value.

It’s a funding alternative that allows investors to unlock equity and provides new flexibility to rental property investors, including all-cash buyers.

For more information about how B2R can help you obtain rental property financing to grow your business, just call 800-227-8107 or visit www.b2rfinance.com/borrowers and follow us on Twitter @B2RFinance.

The information on this page is provided for informational purposes only and does not constitute investment, real estate, or legal advice. This information should not be regarded as a recommendation or an offer to buy or sell any product or service to which this information may relate. No representations or warranties whatsoever, express or implied, are given as to the accuracy or applicability of the information contained herein. The information may be modified or rendered incorrect by changes in the marketplace or developments in the law, or for any other reason, and may not be applicable to any individual reader’s facts and circumstances.

Financing for Rental Property Investors

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